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Magna CEO Says Spending On Electric, Self-Driving Cars Should Be Reduced By Auto Industry


01/17/2019


Magna CEO Says Spending On Electric, Self-Driving Cars Should Be Reduced By Auto Industry
According to the chief executive of global parts supplier Magna International, the focus of the global automobile and auto parts manufacturers should be on forming partnerships and should reduce the amount of investments that they are making of they want to take advantage of demand for electric and autonomous vehicles.  
 
Magna CEO Don Walker said that spending of $300 billion to bring electric cars to the mass market is being planned by vehicle and parts suppliers over the next decade. That number, according to Walker, is a significant increase compared to the $90 billion for the period that was estimated to be invested last year by the industry.
 
"We have to reduce the amount of money everybody's pouring in, because the end consumer basically wants cheap transportation," he said in a speech at the Automotive News World Congress in Detroit. "Ultimately, we need to be more efficient with the capital we deploy in the industry."
 
The comments by Walker bore relevance as a very large and significant partnership was announced at the Detroit auto show between US car manufacturer Ford Motor Co and German car maker Volkswagen AG under which both the companies have decided to use common resources to manufacture commercial vans and pickups. The two companies also announced partnership for the development of technologies for electric and self-driving technology. Both the companies believe that they can save up to billions of dollars form the partnership.
 
Large investments are also being made on electric vehicles in areas such as battery startups and charging stations by big oil, telecommunications and technology companies.
 
Walker however said that the investments would not get returns pretty soon.
 
He said that there are a number of factors that industry experts believe would shape the future of electric and autonomous vehicle adoption which includes evolving battery chemistry, costs of vehicles and their performance, infrastructure and government regulation.
 
Walker said that all-electric vehicles will make up just 4 to 6 percent of market share by 2025 according to the estimates by Aurora, Ontario-based Magna, the world's third-biggest parts supplier.
 
On the other hand, 6 to 9 per cent of the auto market would be comprised of plug-in hybrid electric vehicles while 30 percent to 37 per cent of the market would be accounted for by vehicles with internal combustion engines.
 
Walker said that $80 billion to $95 billion in annual sales is estimated from the sale of autonomous vehicles in 2030. He further estimated that just about 7 per cent of the entire market would be accounted for by fully autonomous vehicles - those that would not have steering wheels or pedals. Further, either no or partial automation would account for about 70 percent of the market while vehicles with extensive automation would have 23 per cent of the market share.
 
"This is a very expensive endeavor (with) lots of people working on it," Walker said of autonomous vehicles. "I think we need to have more cooperation."
 
(Adapted from Economic Times.com)


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